Staples, Inc. (NASDAQ: SPLS) (“Staples” or the “Company”) today
announced that Arch Merger Sub Inc., a Delaware corporation
(“Merger Sub”), formed by funds managed by Sycamore Partners
Management, L.P. (“Sycamore”) in connection with the previously
announced proposed acquisition of the Company by such funds,
pursuant to the Agreement and Plan of Merger, dated as of June 28,
2017 (the “Merger Agreement”), by and among the Company, Arch
Parent Inc., a Delaware corporation (“Parent”), and Merger Sub, in
which Merger Sub will merge with and into the Company with the
Company continuing as the surviving corporation (the “Merger”), has
priced an offering of $1 billion in aggregate principal amount of
Senior Notes due 2025 (the “Notes”). The Notes will bear an
interest rate of 8.500% per annum and will be issued at a price of
100% of the aggregate principal amount.
Consummation of the offering is subject to customary closing
conditions, and is expected to occur on August 28, 2017. Merger Sub
intends to use the proceeds from the offering of the Notes,
together with borrowings under certain senior secured credit
facilities (the “New Senior Secured Credit Facilities”) and the
cash equity contributions of certain funds managed by Sycamore, to
finance the consummation of a portion of the Merger attributable to
the acquisition of the North American Delivery business of Staples
and to pay related fees, costs and expenses.
Upon consummation of the offering of the Notes, Merger Sub will
deposit into a segregated escrow account with Wells Fargo Bank,
National Association, as escrow agent, the gross proceeds from the
offering of the Notes plus an amount sufficient to fund a special
mandatory redemption of the Notes, including accrued interest on
the Notes through September 30, 2017. If the Merger is not
consummated on or prior to December 28, 2017 or if the Merger
Agreement is otherwise terminated, the Notes will be subject to a
special mandatory redemption. The special mandatory redemption
price will be equal to 100% of the initial issue price of the
notes, plus accrued and unpaid interest to, but not including, the
date of such special mandatory redemption. Upon consummation of the
Merger, Merger Sub will be merged with and into the Company, the
Company will assume all of the obligations of Merger Sub under the
Notes and each of the Company’s existing and future wholly-owned
domestic restricted subsidiaries that guarantee the New Senior
Secured Credit Facilities will guarantee the Notes.
The Notes were only offered to persons reasonably believed to be
qualified institutional buyers in accordance with Rule 144A under
the Securities Act of 1933, as amended (the “Securities Act”), and
to non-U.S. persons outside the United States pursuant to
Regulation S under the Securities Act. The Notes have not been
registered under the Securities Act or any state or other
jurisdiction’s securities laws. Accordingly, the Notes may not be
offered or sold in the United States absent registration or an
applicable exemption from registration requirements under the
Securities Act and any applicable state or other jurisdiction’s
securities laws.
This news release is neither an offer to sell nor a solicitation
of an offer to buy any securities and shall not constitute an offer
to sell or a solicitation of an offer to buy, or a sale of any
securities in any jurisdiction in which such offer, solicitation or
sale is unlawful.
Additional Information and Where to Find It
This news release may be deemed solicitation material in respect
of the proposed acquisition of the Company by Parent. The Company
filed a definitive proxy statement with the SEC in connection with
the transaction (the “Proxy Statement”), including a form of proxy
card, on August 3, 2017. The Proxy Statement and form of proxy card
have been mailed to the Company’s stockholders. This news release
does not constitute a solicitation of any vote or approval. The
Proxy Statement contains important information about Parent, the
Company, the Merger and related matters. Investors and security
holders are urged to read the Proxy Statement carefully.
Investors and security holders can obtain free copies of the
Proxy Statement and other documents filed with the SEC by Parent
and the Company through the web site maintained by the SEC at
www.sec.gov. In addition, investors and security holders can obtain
free copies of the Proxy Statement from the Company by contacting
Staples Investor Relations department at investor@staples.com. In
addition, the proxy statement and the Company’s annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form
8-K and amendments to those reports filed or furnished pursuant to
section 13(a) or 15(d) of the Securities Exchange Act of 1934 are
available free of charge through the Company’s website at
investor.staples.com as soon as reasonably practicable after they
are electronically filed with, or furnished to, the SEC.
The Company, and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from the
Company’s stockholders with respect to the transactions
contemplated by the Merger Agreement. Information regarding the
Company’s directors and executive officers, including their
ownership of the Company’s securities, is contained in the
Company’s Annual Report on Form 10-K for the year ended January 28,
2017 and its proxy statement dated April 20, 2017, and in the Proxy
Statement dated August 3, 2017, each of which is filed with the
SEC. Investors and security holders may obtain additional
information regarding the direct and indirect interests of the
Company and its directors and executive officers in the proposed
transaction by reading the Proxy Statement and other public filings
referred to above.
About Staples, Inc.
Staples brings technology and people together in innovative ways
to consistently deliver products, services and expertise that
elevate and delight customers. Staples is in business with
businesses and is passionate about empowering people to become true
professionals at work. Headquartered outside of Boston, Mass.,
Staples, Inc. operates primarily in North America.
Safe Harbor for Forward-Looking Statements
Statements in this news release regarding the offering of the
Notes, the proposed Merger, the expected timetable for consummation
of the offering and completing the Merger, future financial and
operating results, future opportunities for the combined company
and any other statements about Parent’s and our management’s future
expectations, beliefs, goals, plans or prospects constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Any statements that are
not statements of historical fact (including statements containing
the words “believes,” “plans,” “anticipates,” “expects,”
“estimates” and similar expressions) should also be considered to
be forward-looking statements, although not all forward-looking
statements contain these identifying words. Readers should not
place undue reliance on these forward-looking statements. The
Company’s actual results may differ materially from such
forward-looking statements as a result of numerous factors, some of
which the Company may not be able to predict and may not be within
the Company’s control. Factors that could cause such differences
include, but are not limited to, (i) the risk that the proposed
Merger may not be completed in a timely manner, or at all, which
may adversely affect the Company’s business, (ii) the failure to
satisfy all of the closing conditions of the proposed Merger,
including the adoption of the Merger Agreement by the Company’s
stockholders and the receipt of certain governmental and regulatory
approvals in the U.S. and in foreign jurisdictions, (iii) the
occurrence of any event, change or other circumstance that could
give rise to the termination of the Merger Agreement, (iv) the
effect of the announcement or pendency of the proposed Merger on
the Company’s business, operating results, and relationships with
customers, suppliers, competitors and others, (v) risks that the
proposed Merger may disrupt the Company’s current plans and
business operations, (vi) potential difficulties retaining
employees as a result of the proposed Merger, (vii) risks related
to the diverting of management’s attention from the Company’s
ongoing business operations, and (viii) the outcome of legal
proceedings instituted against the Company related to the Merger
Agreement or the proposed Merger. There are a number of important,
additional factors that could cause actual results or events to
differ materially from those indicated by such forward-looking
statements, including the factors described in the Company’s Annual
Report on Form 10-K for the year ended January 28, 2017 and its
most recent quarterly report filed with the SEC. The Company
disclaims any intention or obligation to update any forward-looking
statements as a result of developments occurring after the date
hereof.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170815005530/en/
Staples, Inc.Mark Cautela,
508-253-3832mark.cautela@staples.com
Staples, Inc. (NASDAQ:SPLS)
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